Insurance Policy Information for Eaton Fire Victims

By ARI FRIEDMAN, Partner and trial attorney at Wisner Baum LLP
Published on Jan 24, 2025

Ari Friedman, Partner and trial attorney at Wisner Baum LLP. [Courtesy image]

For anyone impacted by the Eaton Fire, navigating insurance claims, finding temporary housing, and figuring out the rebuilding process can be overwhelming. There’s been a lot of noise in the community and some really concerning advertisements and information circulating[a]. I want to use this time to bring some experience learned from previous California wildfires and utility-caused disasters into what you’re going through. Hopefully, this will provide some insight and guidance that can help you through the immediate recovery process, including dealing with insurance claims.

Here is an overview of the most essential information at this early stage to assist you on the path to recovery. You can also watch our virtual town hall to learn more about these and other wildfire claims issues.

Insurance Overview

Before we start, if you have homeowner’s insurance and have not done so already, open your insurance claim as soon as possible. Insurance companies must respond to you within 15 days. If you have a total loss, let them know immediately (sending photos can help) so they understand the severity of your loss and can issue you any immediate payment requirement under your policy.

Insurance claims can be complicated depending on your coverage, but most policies share some basic features that can be paid out shortly after a disaster.

1. Coverage A (Dwelling)
This covers your main structure and anything attached to it—built-in garages, porches, built-in appliances, for example. Coverage A is usually based on the actual cash value (ACV) of what was lost. ACV is fair market value at the time of loss, which factors in depreciation. Essentially this is the value of your home the day before the fire. Some policies may give replacement cost value (RCV), which covers the cost to rebuild the insured structure. There will also be a policy limit, that sets the maximum amount the insurance company will pay for that coverage, absent any additional riders or add-ons like allocations for additional money to cover code upgrades.

2. Coverage B (Other Structures)
This covers structures not attached to your main dwelling but affixed to the land—fences, standalone garages, pool houses, sheds on foundations, etc. Typically, Coverage B is a set percentage of Coverage A, and can also be subject to ACV or RCV. Be sure to pay special attention to fences and gates—fire damage, especially high-heat exposure, can compromise the integrity of concrete, stone, or metal. Even if it appears fine at first, problems may manifest later, creating frustration with the claims process as it gives the insurance company the ability to say the damage is not fire-related.

3. Coverage C (Personal Property)
This covers everything in your home that’s not nailed down, wherever it was located (whether in a shed or a kitchen). Under California law (CA Ins. Code 10103.7) when a homeowner suffers a total loss the insurance company must advance at least 30% of your Coverage A limit as personal property coverage without requiring a content or inventory list. For example, if Coverage A is $500,000, the insurance company required to pay out at least $150,000 (capped at $250,000). Your insurance company will most likely require you to create an inventory list to get access the remainder of the policy amount. This can be an emotionally difficult task, as you have to remember and record everything you’ve lost. I strongly encourage you to do a complete inventory list now, and not stop when you reach your policy maximum. If there is a litigation regarding the cause of the fire, a complete inventory list will be vital to help maximize your recovery.

• Tip for Creating an Inventory List: Photos and videos can be used as proof of what you had. Recording your items on a spreadsheet can be helpful, too. The nonprofit United Policyholders provides a template that goes room by room with hundreds of typical household items. Your insurance company may also provide you with a form, so be sure to ask.

4. Coverage D (Loss of Use)
Often referred to as Additional Living Expenses or ALE, this coverage provides living expenses after a covered loss, like food and temporary living expenses. Policies can differ in the nature of coverage, but generally, you are entitled to secure temporary housing that is similar to what you lost. If you are staying with friends or family, keep in mind that you can pay them a fair rental rate, which the insurance company may reimburse. Be sure to speak with your insurance company about your coverage and limits. Be sure to scrutinize the insurance company’s claim of what your monthly expense calculation is, as that will serve as the basis for your ALE payment.

Insurers are required to advance you at least four months of ALE to help you get situated. After that initial payment, you typically have to pay for your living expenses and then file for reimbursement. Be sure to keep thorough documentation, photos, and receipts.

There are other issues claimants will face, including debris removal, smoke damage, lawsuits that can supplement claims reimbursement and much more. Don’t underestimate the power of your community and neighborhood, many of your friends and family who are similarly situated might be able to offer insight and support for what you are going through. If you have questions about what is covered above, or any other questions about your claim, please contact a law firm, non-profit, local agencies, or other licensed professionals that are offering no strings attached free insurance consults. My law firm, and others, are dedicated to helping you recover the most from your insurance company. Feel free to reach out to us for a free insurance policy consult.

Remember: you are not alone. There are resources available to help you rebuild and move forward.

Ari Friedman is a partner and trial attorney at Wisner Baum LLP.

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